Friday, November 5, 2010

Where do I start from ?

Everyone wonders, where does one start to invest. Well there is never a good time. If you havent been doing it early, then NOW is the right time. Start with small amount. If you dont know the meaning of small amount as such, then see the difference between your monthly income and expenses. Whatever remains is the only amount you have. Now if that amount is very less, then you should try and save atleast 1000 per month. Cut your expense wherever needed, but then you dont have any other choice. Keep this amount separately in a different account if possible. Once you accumulate anything above 5000 INR, then put it into an FD.
Well this is the simplest and the safest form of investing you can do without any harm done and least risk. But again the returns too will be dependent on the prevailing interest rates.

For higher returns you would need to venture into Equity markets. Now again in Equity you can chose to play safe by giving your money to a Fund manager and he will invest properly on your behalf. But off course, whether you have a profit or a lot, he will charge you for his services.
The different options that you to invest into equity are

  1. Directly into the Stock Market
  2. Investing into Mutual Funds
  3. Investing into Equity through Insurance related schemes.
These are the high level ones and can be dealt in detail in each one of them

So if you are looking at investing into stock market then get yourself an Demat account opened. 
Again for mutual funds you may need a demat account but for some you may get them in physical form itself.

ULIP's  gives you the flexibility to invest into equity, with the benefit of an Insurance cover and Tax Benefits. For the insurance there are many many plans and schemes. Just call an agent and get yourself familiarised with the same.

Another safe option would be to invest in Gold. Now Gold can be bought in physical form or in the ETF's which are like shares in demat form. This gives you the flexibility to just have the details without having the botheration of safekeeping of Gold. And can be bought and sold easily. Most importantly, even if you have less money , with which no one will be able to give you a small amount of Gold, ETF can do the job for you.

Keep saving, Keep investing. Just remember to save a little everyday, and that would help you a lot in the long run. 
For example, just by skipping one coffee at any coffee outlet you would be saving 60/- per day. Which would amount to 1800 per month and approx 20000 an year. Good enough to have a nice Insurance plan to cover you and your family just at the cost of coffee. 
Have a nice day

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